Intel has revealed a major hardware bug with computers using the new Sandy Bridge processor, which will cost the chipmaker $1bn, the company said on Monday.

Intel's Sandy Bridge bug caused the company's shares to drop on the NYSE as it suspended trading. Credit: Google Finance

The bug, which Intel said will cost it some $1bn (£629m) in lost sales and repairing and replacing systems in the market, is not in the Sandy Bridge processor itself but in the accompanying Cougar Point chipset. The problem will delay the launch of dual-core consumer systems based on the architecture by "a few weeks", the company said.

"Intel has discovered a design issue in a recently released support chip — the Intel 6 Series, code-named Cougar Point — and has implemented a silicon fix," the company said in a statement. "In some cases, the Serial-ATA (Sata) ports within the chipsets may degrade over time, potentially impacting the performance or functionality of Sata-linked devices such as hard-disk drives and DVD drives."

Intel shares were suspended at 14.56pm GMT, just 26 minutes after trading opened, and restarted at 15.20pm GMT.

The company has had to recall chips in the past, most famously in 1994 with a floating-point problem in the original Pentium design. In a conference call on Monday, Intel vice president Steve Smith said that, given the nature of the Cougar Point bug, the company believes the issue would have been rarely encountered.

"This is a degradation of a statistical nature," Smith said. "A few percent, in single figures, may degrade over the three-year lifetime of a notebook."

Smith said that the chips had passed all of Intel's and its customers' functional tests, but some of the more than 100,000 samples that the company had shipped were returned with the fault late in January.

"Once we understood the issue, it took a few more days to characterise it. We concluded our analysis last night and decided to put shipments on hold as of this morning," he said.

Chip changes

The necessary changes to the chipset came at a late stage in its production process, Smith said, so most of the existing unfinished silicon in production could still be used.

"We made a metal layer change to put the circuit back to a robust operating mode," he said. "It's a change to one of the upper layers of metal — a late mask layer — so we can use [chips already in] the pipeline. We're very confident."

Drives to push Sandy Bridge systems into the consumer market in the second quarter of the year should not be greatly affected, although there would be some delays, Smith said.

"We expect to resume shipping the chipset in a few weeks, with full volume following very quickly," he said. "We'll be fully supporting demands by April, perhaps March. We were planning to launch mainstream systems with dual-core in a few weeks, and this will push the launch a few weeks relative to our plans."